IAMGOLD Corporation (TSX: IMG) (NYSE: IAG) reported its consolidated financial and operating results for the quarter ended June 30, 2020.
“IAMGOLD delivered solid operating results in the quarter, generating $72.4 million in operating cash flow and producing 155,000 ounces of gold. These results were achieved despite the temporary suspension of mining activities at Westwood and Rosebel, with both operations back online as of April 15 and July 24, respectively, and the anticipated continued impact of the global COVID-19 crisis,” commented Gordon Stothart, President and CEO of IAMGOLD. “During the quarter, we have taken significant, proactive steps at each of our operations to establish protocols enabling us to deliver on our long-term strategy, while prioritizing the health and safety or our workforce and host communities. I would like to commend our employees for their extraordinary dedication, perseverance, and professionalism during these unprecedented times.”
Mr. Stothart stated, “On July 21, together with our JV partner, Sumitomo Metal Mining Co., we announced the decision to proceed with the construction of the Côté Gold Project, located in northern Ontario. Côté is a world-class deposit and is transformational to IAMGOLD’s future, reducing overall operating costs, increasing total production, increasing the number of mines and bringing greater geographic diversity to our portfolio. Our strong financial position, with over $860 million in cash and short-term investments, coupled with operating cash flows from our existing mines, enable us to take this important step toward executing on our best-in-class growth pipeline.”
Mr. Stothart announced, “After 13 years with the Company, Carol Banducci has advised us of her intention to retire from IAMGOLD on March 31, 2021. Carol has steadfastly seen the Company through a bull market, a bear market and several transitions. Her disciplined approach to financial management and success in building an outstanding finance and accounting team, has positioned the Company exceptionally well today for both challenges and opportunities. I wish her all the best in retirement, and look forward to our continued work together until that time.”
Carol Banducci, EVP and CFO, commented, “It is with mixed emotions that I announce my retirement from the Company. IAMGOLD is an exciting place to be, with an incredible pipeline of projects and outstanding people. I look forward to working with Gord and the team to advance our ongoing work, and to ensure a smooth transition process.”
“In addition,” Mr. Stothart continued, “Jeffery Snow, General Counsel and Senior Vice President, Business Development, will be retiring from the Company effective August 31, 2020. Jeff has had a storied 39-year career at the intersection of law and mining. We will miss his wise counsel, and wish him all the best in his well-deserved retirement.”
Second Quarter 2020 Highlights
GLOBAL COVID-19 CRISIS
Development and Operations
Subsequent to the Quarter
UPCOMING GROWTH CATALYSTS
SUMMARY OF FINANCIAL AND OPERATING RESULTS
|Three months ended June 30,||Six months ended June 30,|
|Financial Results ($ millions, except where noted)||2020||2019||2020||2019|
|Cost of sales||$||228.3||$||239.9||$||470.9||$||491.8|
|Net earnings (loss) from continuing operations attributable to equity holders of IAMGOLD||$||25.5||$||(18.6||)||$||(8.9||)||$||(59.3||)|
|Net earnings (loss) from continuing operations attributable to equity holders of IAMGOLD ($/share)||$||0.05||$||(0.04||)||$||(0.02||)||$||(0.13||)|
|Adjusted net earnings (loss) from continuing operations attributable to equity holders of IAMGOLD1||$||20.1||$||(15.5||)||$||16.5||$||(17.7||)|
|Adjusted net earnings (loss) from continuing operations attributable to equity holders of IAMGOLD ($/share)1||$||0.04||$||(0.03||)||$||0.03||$||(0.04||)|
|Net cash from operating activities||$||72.4||$||40.6||$||116.4||$||48.7|
|Net cash from operating activities before changes in working capital1||$||79.0||$||42.8||$||151.8||$||75.9|
|Key Operating Statistics|
|Gold sales – attributable (000s oz)||153||174||312||352|
|Gold production – attributable (000s oz)||155||184||325||357|
|Average realized gold price1 ($/oz)||$||1,724||$||1,316||$||1,663||$||1,312|
|Cost of sales2 ($/oz)||$||1,030||$||941||$||1,042||$||952|
|Total cash costs1 ($/oz)||$||935||$||893||$||966||$||891|
|All-in sustaining costs1 ($/oz)||$||1,189||$||1,146||$||1,210||$||1,124|
|Gold margin1 ($/oz)||$||789||$||423||$||697||$||421|
SECOND QUARTER 2020 SUMMARY
Production and Costs
Commitment to Zero Harm Continues
ATTRIBUTABLE GOLD PRODUCTION AND COSTS
|Cost of Sales1
($ per ounce)
|Total Cash Costs2 ($ per ounce produced)||All-in Sustaining Costs2,3
($ per ounce sold)
|Three months ended June 30,||2020||2019||2020||2019||2020||2019||2020||2019|
|Cost of sales1 ($/oz)||$||1,030||$||941|
|Cash costs, excluding royalties||$||855||$||836|
|Total cash costs2||$||935||$||893|
|All-in sustaining costs2,3||$||1,189||$||1,146|
|Cost of Sales1
($ per ounce)
|Total Cash Costs2
($ per ounce produced)
|All-in Sustaining Costs2,3
($ per ounce sold)
|Six months ended June 30,||2020||2019||2020||2019||2020||2019||2020||2019|
|Cost of sales1 ($/oz)||$||1,042||$||952|
|Cash costs, excluding royalties||$||890||$||832|
|Total cash costs2||$||966||$||891|
|All-in sustaining costs2,3||$||1,210||$||1,124|
|IAMGOLD Full Year Attributable Guidance1||Revised1||Previous2|
|Essakane (000s oz)||350 – 370||350 – 370|
|Rosebel (000s oz)||210 – 230||250 – 270|
|Westwood (000s oz)||85 – 100||85 – 100|
|Total attributable production (000s oz)||645 – 700||685 – 740|
|Cost of sales3 ($/oz)||$990 – $1,030||$955 – $995|
|Total cash costs4,5 ($/oz)||$940 – $980||$920 – $960|
|All-in sustaining costs4,5 ($/oz)||$1,195 – $1,245||$1,195 – $1,245|
GOLD PRODUCTION, COST OF SALES, TOTAL CASH COSTS AND ALL-IN SUSTAINING COSTS
IAMGOLD lowered its 2020 total attributable gold production guidance to the range of 645,000 to 700,000 ounces from 685,000 to 740,000 ounces reflecting the suspension of operations on June 12, 2020 at the Rosebel Gold Mine in response to COVID-19 being detected amongst operations personnel. This operations suspension was lifted on July 24, 2020 once the Suriname national health authorities confirmed it was safe to do so, and that the appropriate controls have been adopted by personnel to ensure the safety of all employees. COVID-19 prevention protocols implemented include a reduced workforce to promote physical distancing in the camp facilities, which has in turn resulted in modifications to planned production volumes.
To safely achieve the full year production guidance, IAMGOLD is expected to incur incremental costs including increased number of sleeping quarters, adjusted work schedules and transport, expediting key supplies, additional security and screening measures, and personal protective equipment to protect IAMGOLD’s workforce. Higher royalty expenses are expected due to the higher gold price expected in the year.
We revised upwards our 2020 cost of sales per ounce sold guidance to the range of $990 to $1,030 from $955 to $995 primarily due to the global COVID-19 crisis resulting in lower sales volume relative to the previous guidance.
We revised upwards our 2020 total cash costs2 per ounce produced guidance to the range of $940 to $980 from $920 to $960 primarily due to the global COVID-19 crisis resulting in lower production volume relative to the previous guidance.
IAMGOLD maintains its 2020 all-in sustaining costs2 per ounce sold guidance range of $1,195 to $1,245.
All-in sustaining costs2 in the third quarter 2020 are expected to be higher than the second quarter due to the resumption of sustaining capital programs with similar production levels. In addition, costs are expected to be higher in the third quarter as compared to the second quarter due to additional COVID-19 related expenditures.
Depreciation expense in 2020 is expected to be in the range of $245 million to $255 million, a decrease of $5 million from previous guidance.
We expect to pay cash taxes in the range of $30 million to $45 million in 2020. IAMGOLD is subject to income tax in several jurisdictions, at various tax rates. However, the consolidated effective tax rate for IAMGOLD is subject to significant fluctuations period over period due to: expenditures and revenues recognized only for financial accounting purposes or only for income tax purposes; income tax unrelated to the income or loss before taxes for the current period, such as withholding taxes; and adjustments for deferred tax purposes that are not directly related to the income or loss before taxes for the current period, such as foreign exchange rate changes. In addition, adjustments to deferred income tax assets and/or liabilities may be recorded during the year.
CAPITAL EXPENDITURES OUTLOOK
|Côté Gold (70%)||–||77||77||–||45||45|
We reduced our 2020 capital expenditure guidance by $5 million to $340 million (±5%) compared to the previous guidance. Non-sustaining capital expenditures increased by $5 million and sustaining capital expenditures decreased by $10 million. The $5 million increase in non-sustaining capital expenditures was primarily due to $32 million in higher expected capital expenditures at the Côté Gold Project as construction ramps up towards the end of the year and a $3 million increase in sustaining capital at Westwood, partially offset by a $15 million reduction in capitalized stripping at Essakane, and a $15 million reduction in capitalized stripping at Rosebel. The $10 million decrease in sustaining capital is due to lower capitalized stripping at Rosebel.
(refer to February 19, 2020 news release)
Although guidance for 2021 remains unchanged at this time, it continues to be under review given the current global uncertainty with respect to the spread of COVID-19 and the effect it may have on the IAMGOLD’s operations. IAMGOLD expects 2021 attributable gold production to be in the range of 760,000 to 840,000 ounces, approximately 19% higher than the expected 2020 production levels. Capital expenditures, not inclusive of development projects, are expected to be approximately $250 million with the expected completion of the development of Saramacca in 2020 and lower capitalized stripping compared to 2020.
On July 21, 2020, we announced the decision to proceed with the construction of the Côté Gold Project. IAMGOLD’s expected go-forward capital obligation (exclusive of sunk costs) is in the range of $875 million to $925 million for its 70% share of project construction costs, assuming the leasing of major mining equipment of approximately $80 million. IAMGOLD expects to spend approximately 45% of the capital in 2021, assuming a go-forward USDCAD exchange rate of $1.35.
|OPERATIONS ANALYSIS BY MINE SITE|
Essakane Mine – Burkina Faso (IAMGOLD interest – 90%)
The site actively managed the restrictions resulting from the global COVID-19 crisis and production activities progressed, although at a slower pace.
Attributable gold production for the second quarter 2020 was lower by 6% compared to the same prior year period due to lower mill throughput resulting from the COVID-19 crisis. The impact of lower throughput was partially offset by a 13% increase in grades compared to the same prior year period as available mine crews focused on mining high grade zones as opposed to zones requiring capitalized stripping. Gold sales for the second quarter 2020 were lower by 7%, compared to the same prior year period.
Material mined in the second quarter 2020 was 20% lower compared to the same prior year period with fewer mining crews available as a result of COVID-19 restrictions. Waste mined for the second quarter 2020 was 24% lower compared to the same prior year period as mining was focused on areas with accessible higher grade ore. Although the Mill Upgrade Project was temporarily suspended in the second quarter as a result of COVID-19 restrictions, approximately 80% of the equipment required for the Project was received during the quarter. Construction of the concrete foundation is scheduled to begin in the third quarter 2020.
Cost of sales per ounce sold for the second quarter 2020 was higher by 12% compared to the same prior year period primarily due to higher operating costs, lower sales volume and higher royalties resulting from higher realized gold prices.
Total cash costs per ounce produced for the second quarter 2020 were higher by 7% compared to the same prior year period primarily due to lower production volume and higher royalties driven by higher realized gold prices.
All-in sustaining costs per ounce sold for the second quarter 2020 were higher by 4% compared to the same prior year period, primarily due to higher cost of sales per ounce offset by marginally lower sustaining capital expenditures.
Sustaining capital expenditures for the second quarter 2020 of $8.9 million included capital spares of $3.2 million, mill equipment of $2.6 million, security of $1.3 million, generator overhaul of $0.7 million and various other sustaining capital expenditures of $1.1 million. Non-sustaining capital expenditures of $12.8 million included capitalized stripping of $10.6 million, tailings and liners of $1.0 million, and other non-sustaining capital of $1.2 million.
IAMGOLD has maintained Essakane’s 2020 attributable production guidance range of 350,000 to 370,000 ounces. The mine continues to proactively undertake several COVID-19 related risk mitigation measures to limit the level of interaction within the workforce to support safe continuation of operations. Capital expenditures are expected to be approximately $105 million, comprising $40 million of sustaining capital expenditures and $65 million of non-sustaining capital expenditures.
Rosebel Mine – Suriname (IAMGOLD interest – 95%)
On June 12, 2020, IAMGOLD suspended operations at the mine as a result of a work stoppage initiated by the Rosebel Union (see news release dated June 16, 2020). IAMGOLD resumed operations on July 24, 2020.
Attributable gold production for the second quarter 2020 was lower by 28% compared to the same prior year period due to lower throughput and ore mined resulting from the mine site closure. Access to the Saramacca pit resulted in ore feed of 379,000 tonnes containing a higher grade of 1.43 g/t.
The Saramacca haul road and additional infrastructure are prioritized to be completed in the second half of 2020.
Cost of sales per ounce sold for the second quarter 2020 was higher by 2% compared to the same prior year period. This was primarily due to decreased sales volume, and the draw-down of low grade stockpiles to supplement the mill and was partially offset by lower mining and milling costs.
Total cash costs per ounce produced for the second quarter 2020 were lower by 2% compared to the same prior year period primarily due to lower mining and milling costs, partially offset by lower production volume.
All-in sustaining costs per ounce sold for the second quarter 2020 were higher by 3% compared to the same prior year period primarily due to higher cost of sales per ounce sold, partially offset by lower sustaining capital expenditures.
Sustaining capital expenditures for the second quarter 2020 of $8.9 million included capital spares of $4.8 million, mill equipment of $0.8 million, mobile equipment of $0.7 million, building upgrades of $0.6 million, resource development of $0.5 million, and tailings management of $0.3 million and various other sustaining capital expenditures of $1.2 million. Non-sustaining capital expenditures of $6.7 million included $5.1 million related to the Saramacca Project and $1.6 million of capitalized stripping.
IAMGOLD has lowered Rosebel’s attributable production guidance in 2020 to the range of 210,000 to 230,000 ounces from 250,000 to 270,000 ounces reflecting the operational impact of the global COVID-19 crisis and the suspension of operations on June 12, 2020. Capital expenditures are expected to be approximately $90 million, comprising $50 million of sustaining capital expenditures and $40 million of non-sustaining capital expenditures.
Westwood Mine – Canada (IAMGOLD interest – 100%)
Westwood was placed on care and maintenance on March 25, 2020, along with other mining companies province-wide, as directed by the Government of Quebec in response to the COVID-19 crisis as mining was considered a non-essential business. Subsequently on April 15, 2020, Westwood commenced the restart of operations from care and maintenance following the April 13, 2020 confirmation from the Government of Quebec that mining is an essential business. The restart at Westwood was done in accordance with the standards set by the Government of Quebec, the Public Health Directorate and the Commission des normes, de l’équité, de la santé et de la sécurité du travail (“CNESST”) to limit the risk of the spread of COVID-19. Ramp-up activities included training employees on new procedures and sanitary measures, adjusted work schedules and transport, and physical distancing and protective equipment.
The site continued its strategy of keeping the mill full with feed from other sources during the ramp-up period. In order to maximize the capacity of the mill during the second quarter 2020, the site supplemented high grade underground ore with lower grade ore sourced from the adjacent Grand Duc satellite deposit. In line with this strategy, the site acquired the Fayolle property in Abitibi from Monarch Gold as a potential future ore source.
Gold production for the second quarter 2020 was 17% lower than the same prior year period primarily due to lower grades, partially offset by higher throughput. Grades decreased compared to the same prior year period with lower quantities of material fed from the higher grade underground deposit as a result of the mine being put on care and maintenance. Throughput was 37% higher as a result of supplementing the ore feed with material from Grand Duc.
Underground development continued to progress in the second quarter 2020 to open up access to new mining areas with lateral development of approximately 1,240 metres, averaging 14 metres per day. IAMGOLD released a National Instrument 43-101 Technical Report on August 5, 2020, and re-affirmed long-term production guidance originally disclosed in December 2019 (see news release dated August 5, 2020).
Cost of sales per ounce sold for the second quarter 2020 was higher by 17% compared to the same prior year period, primarily due to lower sales volume in the quarter.
Total cash costs per ounce produced for the second quarter 2020 were higher by 14% compared to the same prior year period primarily due to lower production volume in the quarter.
All-in sustaining costs per ounce sold for the second quarter 2020 were higher by 14% compared to the same prior year period primarily due to higher cost of sales per ounce sold, partially offset by lower sustaining capital expenditures.
Sustaining capital expenditures for the second quarter 2020 of $2.5 million included deferred development of $1.5 million, underground equipment of $0.6 million, underground construction of $0.3 million and other sustaining capital expenditures of $0.1 million. Non-sustaining capital expenditures of $2.2 million included deferred development of $1.3 million, development drilling of $0.4 million, underground construction of $0.3 million and other non-sustaining expenditures of $0.2 million.
IAMGOLD has maintained Westwood’s 2020 production guidance range of 85,000 to 100,000 ounces. The mine continues to proactively undertake several COVID-19 related risk mitigation measures to limit the level of interaction within the workforce to support safe continuation of operations underground and on surface. Capital expenditures are expected to be approximately $43 million, comprising $25 million in sustaining capital expenditures and $18 million in non-sustaining capital expenditures.
Mali – Sadiola Mine (IAMGOLD interest – 41%)
On December 20, 2019, IAMGOLD, together with its joint venture partner, AngloGold Ashanti Limited (“AGA”), entered into an agreement to sell their collective interests in Société d’Exploitation des Mines d’Or de Sadiola S.A. (“Sadiola”) to Allied Gold Corp. for a cash consideration of US$105 million. The transaction remains subject to the fulfillment, or waiver, of a number of conditions precedent, including the receipt of certain approvals and releases from the Government of Mali. In addition, upon the fulfillment or waiver of all conditions precedent to the transaction but immediately prior to closing of the transaction, Sadiola will pay a dividend of $15 million pro rata to its shareholders.
As of December 31, 2019, the Sadiola disposal group met the criteria to be classified as held for sale.
Mali – Yatela Mine (IAMGOLD interest – 40%)
On February 14, 2019, Sadiola Exploration Limited (“SADEX”), a subsidiary jointly held by IAMGOLD and AGA, entered into a share purchase agreement with the Government of Mali, whereby SADEX agreed to sell to the Government of Mali its 80% participation in Société d’Exploitation des Mines d’Or de Yatela, for a consideration of $1. The transaction remains subject to the fulfillment of a number of conditions precedent, among which the adoption of two laws, confirming the change of status of Yatela to a State Entity, and also the creation of a dedicated state agency, notably in charge of mine rehabilitation and closure. As part of the transaction, and upon its completion, IAMGOLD will make a one-time payment of approximately $18.5 million to the said state agency, in an amount corresponding to the estimated costs of completing the rehabilitation and closure of the Yatela mine, and also financing certain outstanding social programs. Upon completion and this payment being made, SADEX and its affiliated companies will be released of all obligations relating to the Yatela mine, including those relating to rehabilitation, mine closure and the financing of social programs.
As of March 31, 2019, the Yatela disposal group met the criteria to be classified as held for sale. The Yatela disposal group continues to meet the criteria to be classified as held for sale as IAMGOLD remains confident that the conditions precedent will be fulfilled and the sale will close.
Together the Sadiola and Yatela disposal groups are considered a separate geographical area of operation and have therefore been presented as discontinued operations in the Consolidated statement of earnings (loss).
Côté Gold Project, Canada
The Côté Gold Project is a 70:30 joint venture between the operator IAMGOLD and Sumitomo Metal Mining Co., Ltd.
During the second quarter 2020, de-risking activities related to the development of the Côté Gold Project continued, with project engineering over 60% complete. De-risking activities remain within the capital expenditure guidance and include detailed engineering, refining the resource block model, and advancing project permitting, including receipt of notification of approval for the application under Section 36 of the Fisheries Act (Canada) for the Project, a key milestone in attaining permits relating to impacts on fish habitats and tailings management. The first phase of camp construction and site tree clearing were also completed during the quarter.
On July 21, 2020, IAMGOLD, together with joint venture partner SMM announced the decision to proceed with the construction of the Project. The decision enables construction to start in the third quarter 2020 with commercial production expected in the second half of 2023. IAMGOLD’s expected go-forward capital obligation, exclusive of sunk costs, is $875 to $925 million for its 70% share of the Project construction costs, assuming the leasing of major mining equipment of approximately $80 million. At a gold price of $1,700, the Project is expected to have a net present value of $2.0 billion and an internal rate of return of 22.4%. During the second half of 2020, the Project will continue to advance detailed engineering in addition to securing long lead equipment, and commencing earthworks, access roads and camp construction. Total planned capital expenditures in 2020 is $77 million.
Drilling activities on the Gosselin Zone were suspended during the second quarter due to restrictions arising from the COVID-19 crisis. Activities are expected to resume during the third quarter and will continue to focus on evaluating the resource potential of the Gosselin Zone.
Boto Gold Project, Senegal
During the first quarter 2020, IAMGOLD announced that the Government of the Republic of Senegal approved the exploitation permit application for the Boto Gold Project for an initial period of 20 years. The Government of Senegal has waived its right to a paid-in 25% interest, contingent on the receipt of $7 million payable at the commencement of commercial production. As per the provisions of the mining code, the Republic of Senegal is entitled to a 10% free-carried interest in an operating company. The receipt of the mining permit positions the Project for a development decision and eventual production.
During the second quarter 2020, IAMGOLD awarded engineering contracts related to access road construction as well as the process plant and the tailings management facility. Planned 2020 capital expenditures are currently $23 million.
Exploration activities during the second quarter focused on infill and delineation drilling aimed at resource conversion and refinement of the reserve block model, as well as evaluating high-priority satellite targets. Approximately 12,400 metres of diamond and reverse circulation (“RC”) drilling were completed during the quarter.
IAMGOLD was active at brownfield and greenfield exploration projects in nine countries located in West Africa and the Americas.
In the second quarter 2020, expenditures for exploration and project studies totaled $7.3 million compared to $14.8 million in the same prior year period, of which $5.7 million was expensed and $1.6 million was capitalized. IAMGOLD’s accounting policy is to expense exploration costs and capitalize costs of evaluating the technical feasibility and commercial viability of extracting a mineral resource, including those on or adjacent to existing mine sites. The decrease in total exploration expenditures compared to the same prior year period reflects largely the impact of work restrictions and program curtailments experienced across most projects arising from the ongoing global COVID-19 crisis. During the quarter, drilling activities on active projects and mine sites totaled approximately 48,400 metres.
|Three months ended June 30,||Six months ended June 30,|
|Exploration projects – greenfield||$||4.0||$||8.1||$||10.0||$||15.7|
|Exploration projects – brownfield1||3.3||5.5||8.0||10.5|
|Feasibility and other studies||–||1.2||–||1.8|
We are maintaining our 2020 exploration expenditure guidance of $52 million, excluding project development activities and studies. The 2020 resource development and exploration program includes approximately 190,000 to 210,000 metres of diamond and RC drilling.
|Exploration projects – greenfield||$||–||$||26||$||26|
|Exploration projects – brownfield2||16||10||26|
BROWNFIELD EXPLORATION PROJECTS
IAMGOLD’s mine and regional exploration teams continued to conduct systematic brownfield exploration and resource development work during the second quarter 2020 at the Essakane, Rosebel and Westwood operations.
Essakane, Burkina Faso
During the second quarter 2020, IAMGOLD completed approximately 900 metres of RC drilling focused on infill and resource development at the Essakane Main Zone. Regional exploration consisted of approximately 900 metres of RC infill drilling at the Tassiri satellite project, located approximately 8 kilometres southwest of the EMZ.
During the second quarter 2020, IAMGOLD completed approximately 12,500 metres of diamond and RC resource infill development drilling at the Saramacca deposit and at the Royal Hill pit on the Rosebel mine concession. Regional exploration activities continued to evaluate various target areas largely focused along the Brokolonko – Saramacca trend.
During the second quarter 2020, underground excavation totaled approximately 1,250 metres of lateral development. In addition, approximately 5,700 metres of surface and approximately 13,000 metres of underground resource development and geotechnical diamond drilling were completed. The underground program focused on infilling known mineralized zones as well as resource definition drilling in areas to be mined. The surface program focused on upgrading resources at the Grand Duc satellite pit, located 3 kilometres west of the Westwood shaft.
Subsequent to the quarter, IAMGOLD provided the results of an updated mineral reserve and mineral resource estimate. As at April 30, 2020, IAMGOLD reported total attributable proven and probable reserves at Westwood of 2.7 million tonnes grading 7.1 g/t Au for 0.6 million contained ounces. Total attributable measured and indicated resources (inclusive of reserves) totaled 4.8 million tonnes grading 10.2 g/t Au for 1.6 million contained ounces, and attributable inferred resources totaled 6.4 million tonnes grading 8.6 g/t Au for 1.8 million contained ounces (see news release dated August 5, 2020).
GREENFIELD EXPLORATION PROJECTS
In addition to the near-mine and brownfield exploration programs described above, IAMGOLD conducted active exploration and drilling programs on a number of early to advanced stage greenfield exploration projects during the second quarter 2020. Highlights included:
During the second quarter 2020, exploration activities were focused on exploring selected high priority geochemical and geophysical targets within a 20-kilometre radius of the Diakha deposit. Approximately 1,300 metres of diamond drilling were also completed during the quarter to test for extensions of the Diakha deposit along strike to the south.
Monster Lake Joint Venture, Canada
The Monster Lake Project, located 50 kilometres southwest of Chibougamau, Quebec, is currently held 75% by IAMGOLD and 25% by TomaGold Corporation.
During the second quarter 2020, IAMGOLD resumed drilling activities and completed approximately 1,400 metres of diamond drilling focused on testing the Annie Shear Zone in an effort to extend the mineralization intersected during 2019.
Nelligan Joint Venture, Canada
The Nelligan Gold Project is currently operating as a 75:25 earn-in option to joint venture with Vanstar Mining Resources Inc., with IAMGOLD holding an option to earn an additional 5% interest. The Project is located approximately 15 kilometres south of the Monster Lake Project in the Chapais – Chibougamau area in Quebec.
During the second quarter 2020, IAMGOLD reported initial assay results from the winter drilling program focused on testing the continuity of the Renard Zone and its western extension. Reported highlights include: 25.1 metres grading 1.87 g/t Au, 27.0 metres grading 2.86 g/t Au, and 10.5 metres grading 10.5 g/t Au (see news release dated June 18, 2020). Drilling activities were suspended during the second quarter due to the impact of work restrictions implemented as a result of the COVID-19 crisis. Planning to resume drilling activities is currently in progress.
Rouyn Option, Canada
IAMGOLD holds a purchase option with Yorbeau Resources Inc. for the Rouyn Gold Project, located near the city of Rouyn-Noranda in Quebec. Under the terms of the purchase agreement, IAMGOLD can acquire a 100% interest in the Project by making scheduled cash payments totaling C$4 million and completing exploration expenditures totaling C$9 million over a four year period. By the end of the expenditure period, IAMGOLD must complete a resource estimate in accordance with National Instrument 43-101, after which IAMGOLD, at its election, can purchase a 100% interest in the Project, subject to a 2% net smelter return, by paying Yorbeau the lesser of C$15 per resource ounce or C$30 million.
During the second quarter 2020, IAMGOLD reported assay results from 2019 and 2020 drilling at Astoria and Lac Gamble, respectively. Highlights include: 9.8 metres grading 10.4 g/t Au, 9.8 metres grading 27.8 g/t Au (including 4.4 metres grading 58.4 g/t Au), and 9.0 metres grading 5.8 g/t Au (see news release dated May 13, 2020).
With the resumption of activities late in the second quarter, IAMGOLD completed approximately 150 metres of diamond drilling designed to test selected high-priority targets near the historic Astoria deposit. Approximately 5,000 metres of drilling in this phase of the program is planned. Results will be used to refine the deposit models for Lac Gamble and Astoria and support an initial resource estimate of the Lac Gamble zone.
Loma Larga (formerly Quimsacocha), Ecuador
IAMGOLD, through its 35.6% equity ownership interest in INV Metals Inc. (“INV Metals”), has an indirect interest in the Loma Larga gold, silver and copper project in southern Ecuador.
During the second quarter 2020, INV Metals filed a National Instrument 43-101 Feasibility Study Technical Report in support of its previously announced updated feasibility study results. The study supports the proposed development of an underground mine with anticipated average annual production of 203,000 gold equivalent ounces over a 12-year mine life with an after-tax internal rate of return of 28.3%, after-tax payback period of 2.4 years, and an after-tax net present value of $454 million using a gold price assumption of $1,400 per ounce (see INV Metals’ news release dated March 31 and April 14, 2020).
For the remainder of 2020, INV Metals plans to focus on permitting efforts for Loma Larga, primarily on obtaining the key environmental permits, along with an Investment Protection Agreement, to allow for its Board of Directors to make a development decision (see INV Metals’ news release dated March 31, 2020).
End Notes (excluding tables)
Jantzi Social Index (“JSI”). The JSI is a socially screened market capitalization-weighted common stock index modeled on the S&P/TSX 60. It consists of companies which pass a set of broadly based environmental, social and governance rating criteria.
Qualified Person Information
The technical information relating to exploration activities disclosed in this news release was prepared under the supervision of, and reviewed and verified by, Craig MacDougall, P.Geo., Senior Vice President, Exploration, IAMGOLD. Mr. MacDougall is a Qualified Person as defined by National Instrument 43-101.
IAMGOLD is a mid-tier mining company with three gold mines on three continents, including the Essakane mine in Burkina Faso, the Rosebel mine in Suriname, and the Westwood mine in Canada. A solid base of strategic assets is complemented by the Côté Gold development project in Canada, the Boto Gold development project in Senegal, as well as greenfield and brownfield exploration projects in various countries located in West Africa and the Americas. On July 21, 2020, IAMGOLD, together with joint venture partner Sumitomo Metal Mining Co. Ltd., announced the decision to proceed with the construction of the Côté Gold Project.
IAMGOLD is committed to maintaining its culture of accountable mining through high standards of ESG practices and employs approximately 5,000 people. IAMGOLD’s commitment is to Zero Harm, in every aspect of its business. IAMGOLD is one of the companies on the JSI index4.
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We acknowledge the [financial] support of the Government of Canada.